A single payer universal healthcare system would reduce U.S. national health expenditures by more than $1 trillion and avert 114,000 deaths annually, according to a new study from researchers at the Yale School of Public Health.
The study, published July 24 in the preprint server medRxiv and not yet peer-reviewed, modeled the transition from the current multi-payer system to a single payer structure as proposed under the Medicare for All Act. It used 2024 National Health Expenditure data as its baseline and incorporated insurance coverage estimates from the American Community Survey and the Commonwealth Fund Biennial Health Insurance Survey.
The authors noted that their estimates are conservative in several respects. They did not count the reduction in billing burden for providers, excluded long term savings from earlier diagnosis and preventive care, and attributed excess mortality due to underinsurance only among adults aged 19 to 64.
Seven things to know:
1. The researchers estimated that a single payer system would bring national health spending down from $5.28 trillion to $4.24 trillion annually, a net reduction of $1.04 trillion, or 19.7%.
2. Five mechanisms drove $1.35 trillion in gross reductions under a single payer system. International reference pricing on pharmaceuticals accounted for $377.5 billion by benchmarking U.S. drug prices to those paid in comparable high-income countries, yielding a 51% reduction. Aligning all provider payments to Medicare reimbursement rates would save $295.6 billion. Administrative overhead would drop by $286.3 billion through consolidation of billing and insurance functions into one reimbursement system. Reduced fraudulent billing, modeled as an 8% reduction consistent with Taiwan’s single payer transition, would account for $285.7 billion in savings. Finally, averted emergency department visits and hospitalizations that timely primary care access would prevent contributed $100 billion to the savings total.
3. Under a single payer system, three mechanisms would raise spending by a combined $304 billion, partially offsetting the reductions above. Expanded utilization by currently uninsured and underinsured individuals would account for $197.7 billion in additional spending, and universal dental coverage would add another $54.7 billion. And recognition of previously uncompensated hospital care would account for the remaining $51.7 billion.
4. The study estimated that 62,863 lives would be saved annually relative to the current system by extending adequate health coverage to the entire U.S. population. The researchers used a mortality hazard ratio of 1.40 for the uninsured and 1.25 for the underinsured, both measured against the adequately insured population. The analysis drew on age-specific data from the American Community Survey and national vital statistics.
5. Nearly half of the estimated mortality benefit is attributable to the underinsured rather than the uninsured, with 33,232 (52.9%) stemming from the uninsured population and 29,631 (47.1%) from the underinsured. In 2024, approximately 27.5 million Americans had no health insurance and more than 45 million adults aged 19 to 64 were underinsured.
6. An additional 51,311 deaths per year would be averted by reversing coverage reductions enacted under HR 1, bringing the combined annual mortality benefit to 114,174 lives. Of that figure, 20,111 deaths are linked to people losing coverage through Medicaid eligibility restrictions, work requirements and the expiration of enhanced ACA subsidies. Another 18,200 deaths follow from the withdrawal of federal assistance that helps low income seniors afford prescription drugs, and 13,000 are attributed to the suspension of minimum staffing standards in nursing homes.
7. The study’s savings estimates held up across multiple sensitivity analyses. Even under the most conservative assumptions tested, which included substituting a smaller pharmaceutical price reduction and removing the fraud adjustment entirely, the system-wide savings remained at least $663.3 billion, or 12.6% of current spending.
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